Legal row continues as HP is given more time to decide what to do about Autonomy accounting claims
HP says it needs another six weeks to consider whether it wants to pursue legal action against former members of Autonomy’s management team, which HP accuses of inflating the $10.3 billion it paid for the British firm in 2011 through fraudulent accounting.
The company’s complaint dates back to November 2012, when it said the results of an internal investigation and forensic review of Autonomy’s historical financial results prior to the takeover, had revealed a number of practices designed to inflate the value of the company and mislead investors and potential buyers at the time of the acquisition.
HP Autonomy saga
HP said at the time it was writing down the value of the acquisition by $8.8billion, but even at the time of the takeover, the purchase price was widely criticised as being too high by analysts. Around 87.3 percent of Autonomy shareholders accepted HP’s offer of £25.50 per share, over 79 percent more than the market price for those shares.
Former Autonomy CEO Mike Lynch has repeatedly denied the claims, while shareholders have accused HP and its CEO Meg Whitman of ignoring warnings prior to the takeover and then not revealing its earlier suspicions.
Last November, US District Judge Charles Breyer in San Francisco said shareholders could pursue legal action against HP, and had given the firm until last Friday to vote on recommendations made by a committee of independent directors by a US District Court,
However, according to a court filing, HP says the board had reviewed the recommendations and “made decisions with respect to the actions that it deems to be in the best interests of the company and its shareholders.” Reuters reports that the lawsuit is now on hold until 28 February.
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